Finance Minister Nirmala Sitharaman on Friday said banks cannot refuse credit to MSMEs under the emergency credit facility and any refusal should be reported.
As of July 23, 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by public sector banks and private banks stands at ₹1,30,491.79 crore, of which ₹82,065.01 crore has already been disbursed.
“Banks cannot refuse credit to MSMEs covered under emergency credit facility. If refused, such instances must be reported. I will look into it”, Ms. Sitharaman said at a closed-door event of industry chamber FICCI.
As part of the Aatmanirbhar Bharat Package, the government had announced ₹3 lakh crore Collateral-free Automatic Loans for businesses, including MSMEs.
The Minister also said the Finance Ministry is working with the Reserve Bank of India on the extension of loan moratorium or a restructuring scheme for the hospitality industry.
“I fully understand the requirements of the hospitality sector on extension of the moratorium or restructuring. We are working with RBI on this,” she said.
Ms. Sitharaman said every step which is being announced and taken to deal with the current situation is being done after exhaustive consultation with the stakeholders and industry experts.
“The focus is on restructuring. Finance Ministry is actively engaged with the RBI on this. In principle, the idea that there may be a restructuring required, is well taken,” a FICCI tweet quoted Ms. Sitharaman as saying.
To help borrowers deal with liquidity crunch during the pandemic, the Reserve Bank had announced a three-month loan moratorium in March, which was later extended by another three months till August 31. Borrowers opting for loan moratorium can defer payment of the interest and principal component of the loan during this period.
The Minister also said that India is asking for reciprocal arrangements with the countries with which we have opened up our markets.
“Reciprocity is a very critical point in our trade negotiations,” she added.
You have reached your limit for free articles this month.
To get full access, please subscribe.
Already have an account ? Sign in
Show Less Plan
Subscription Benefits Include
Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.
Move smoothly between articles as our pages load instantly.
Enjoy reading as many articles as you wish without any limitations.
A one-stop-shop for seeing the latest updates, and managing your preferences.
A select list of articles that match your interests and tastes.
We brief you on the latest and most important developments, three times a day.
*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.